Business Context and Reporting Period
Company: J.W. Mays, Inc.
Filing Type: Form 10-K (Annual Report)
Period Ended: July 31, 2010
Business Overview: The Company operates a portfolio of commercial real estate properties in New York and Ohio. Founded in 1924, it discontinued its department store business in 1989 to focus exclusively on leasing real estate. The Company employs approximately 30 people and has no foreign operations.
Key Financial Metrics
Note: Specific revenue, net income, and cash flow figures for the fiscal year are incorporated by reference from the Annual Report to Shareholders and are not explicitly detailed in the provided text. The following metrics are derived from the filing text:
- Real Estate Portfolio: Total gross carrying cost of real estate is $74,918,445 with accumulated depreciation of $30,544,645.
- Debt Structure: As of July 31, 2010, the Company held fixed-rate debt of $10,442,133 and variable-rate debt of $20,000.
- Market Capitalization: The aggregate market value of voting stock held by non-affiliates was approximately $6,906,975 as of January 31, 2010.
- Shares Outstanding: 2,015,780 shares as of September 10, 2010.
- Dividends: No dividends were declared in fiscal years 2010 or 2009.
- Accounting Fees: Total fees paid to the independent auditor were $97,894 for fiscal year 2010.
Material Changes and Operational Updates
- Property Portfolio Reduction: The Company surrendered possession of the 490 Fulton Street portion of the Jowein building in Brooklyn on May 1, 2010. This resulted in the loss of nine tenants occupying 93,697 square feet. The occupancy rate for the remaining owned portion of the Jowein building is approximately 69.85%.
- Legal Settlement: A lawsuit regarding the Jowein building tenancy was settled in June 2010. The Company paid $1,000,000 to the landlord's successor and transferred title to 484 Fulton Street (appraised at $4,490,000). In exchange, the Company received title to 14 Hanover Place (appraised at $900,000) and a 49-year lease for 20,000 square feet at 25 Elm Place.
- Occupancy Trends:
- Brooklyn (Bond Street): 69.74% occupancy; approximately 25,000 sq. ft. available.
- Jamaica: 80.99% occupancy; approximately 21,000 sq. ft. available.
- Fishkill: 0% occupancy; approximately 203,000 sq. ft. available.
- Massapequa: 85.01% occupancy (leasehold property).
- Circleville: 67.80% occupancy; approximately 70,000 sq. ft. available.
Outlook, Risks, and Contingencies
- Forward-Looking Statements: Management notes that future results may differ due to economic downturns, competitive environments, and regulatory changes. No specific financial guidance was provided in the text.
- Interest Rate Risk: The Company has minimal exposure to variable rates ($20,000 balance). A 100 basis point change would impact net income by approximately $200.
- Legal Contingencies:
- The Company must remove a foot bridge over Bond Street by June 2012; the cost is undetermined.
- If 25 Elm Place is sold or demolished, the Company may be liable to create a condominium unit for a loading dock; costs are undetermined.
- Key Risks: Concentration of ownership (controlling shareholder group), potential conflicts of interest with the largest shareholder, environmental liabilities regarding older properties, and the availability of financing for property "fit-ups."
Investor Verification Checklist
- Financial Statements: Verify total revenue, net income, and operating cash flow in the "Annual Report to Shareholders" (incorporated by reference), as these figures are absent from the 10-K text provided.
- Property Valuation: Confirm the impact of the $1,000,000 settlement payment and the exchange of properties (484 Fulton vs. 14 Hanover) on the balance sheet and future rental income.
- Vacancy Rates: Assess the risk associated with the Fishkill property, which remains 100% vacant with 203,000 sq. ft. available.
- Debt Covenants: Review the terms of the $10.4 million fixed-rate debt to ensure compliance with covenants given the recent property disposition.
- Future Capital Expenditures: Investigate the estimated costs for the required foot bridge removal and potential condominium creation at 25 Elm Place.